This was an action upon two promissory notes for $2,500 each, payable to Horace R. Kelly, indorsed to the Horace R. Kelly & Company, Limited, and by that company indorsed to the firm of which Arguimbau was survivor.
Many pleas were interposed in defense, and, among them, several filed March 24, 1900, and several filed February 2, 1903. By the first of these pleas, defendant below, plaintiff in error here, averred 'that on or about the 18th day of March, A. D. 1893, Horace R. Kelly, claiming to be a manufacturer of cigars, agreed with John Jay Philbrick, during his lifetime, that if he, the said John Jay Philbrick, together with George W. Allen and Charles B. Pendleton, would give to him their four joint and several promissory notes for $2,500 each, two of the said notes payable in one year from the date thereof, and two payable in two years from the date thereof, he, the said Horace R. Kelly, would have cigars manufactured in Key West, Florida, and in no other place, according to the terms of his contract with the Havana & Key West Cigar Company, Limited; that the said contract referred to was a contract between the said Horace R. Kelly and one Max T. Rosen, the president of the Havama & Key West Cigar Company, Limited, and in said contract the said Horace R. Kelly bound himself to have the said Horace R. Kelly Company, Limited, a corporation then existing, judicially dissolved, and after said dissolution, together with himself and others, to organize a company under the laws of the state of West Virginia, to be known as the Horace R. Kelly Company; that the said Horace R. Kelly Company, when so formed, was to enter into an agreement with the Havana & Key West Cigar Company, Limited, whereby it, in its factory at Key West, Florida, was to manufacture cigars and to fill all orders for cigars secured by the said Horace R. Kelly Company, provided such orders should be approved by the president or manager of the Havana & Key West Cigar Company, Limited. And it was then and there understood and agreed by and between the said Horace R. Kelly and the said Max T. Rosen, the president of the Havana & Key West Cigar Company, Limited, that the cigars so manufactured as aforesaid by the Havana & Key West Cigar Company, Limited, at its factory at Key West, Florida, to fill the orders for cigars secured by the said Horace R. Kelly Company, were to be removed from said factory or place where said cigars were made without being packed in boxes on which should be stamped, indented, burned, or impressed into each box, in a legible and durable manner, the number of cigars contained therein, and the number of the manufactory in which the said cigars had been manufactured. That at the time of the making of said contract and understanding and agreement between the said Horace R. Kelly and the said Max T. Rosen, president of the Havana & Key West Cigar Company, Limited, the laws of the United States regulating the manufacture, removal, and sale of cigars provided that, before any cigars were removed from any manufatory or place where cigars were made, they should be packed in boxes, and that there should be stamped, indented, burned, or impressed into each box in a legible and durable manner, the number of cigars contained therein and the number of the manufactory where said cigars were made, and affixed a penalty for the noncompliance therewith; and the said promissory notes sued on are two of the notes made and delivered to the said Horace R. Kelly in consideration of the promises and understandings and agreements aforesaid and are wholly void; all of which the said plaintiffs well knew at the time of the alleged transfer of the said notes to them; and this the defendant is ready to verify.'
The second and third pleas were so nearly identical with the first that they need not be set forth. The pleas of February 2, 1903, set up the same defenses in substance, coupled with the allegation that at the time of the indorsement each of the indorsees had notice of the contract alleged to have formed the consideration of the notes. All these pleas were separately demurred to, special grounds being assigned to this effect; that neither of the pleas stated facts constituting any defense; that the consideration of the notes sued on was the promise of Horace R. Kelly to have cigars manufactured in Key West, and neither of the pleas alleged a breach of the promise that neither of the pleas averred that the alleged proposed contract between the two companies in the pleas stated, and alleged to be illegal, was ever consummated or executed or anything done thereunder; that if cigars were manufactured in Key West, under the said contract between the said two companies in the said pleas stated, the defendant and his intestate derived the same benefit, and received the same consideration for the said notes, whether said contract was legal or illegal.
The demurrers were severally sustained, the case went to judgment in favor of plaintiff, and was taken on error to the supreme court of Florida. The errors assigned there, so far as these pleas were concerned, were simply that the trial court erred in sustaining the demurrer in each instance. The supreme court affirmed the judgment, whereupon a writ of error from this court was allowed by the chief justice of that court, who certified, in substance, that the judgment denied 'a title, right, privilege, or immunity specially set up and claimed by the plaintiff in error under the statutes of the United States of America.'
Six errors were assigned in this court; namely, that the state court erred in holding that the demurrer to the first plea of March 24, 1900, was properly sustained, and that the plea constituted no defense under § 3397 of the Revised Statutes (U.S.C.omp. Stat. 1901, p. 2222), and as to the second plea and § 3393, Revised Statutes (U.S.C.omp. Stat. 1901, p. 2220), and as to the third plea and § 3390, Rvised Statutes (U.S.C.omp. Stat. 1901, p. 2218); and in so holding as to the fourth plea, filed February 2, 1903, and § 3397, Revised Statutes; and as to the fifth plea of that date, and § 3393, Revised Statutes; and as to the sixth plea of that date, and § 3390, Revised Statutes.
The case was submitted on motion to dismiss or affirm.
Messrs. R. H. Liggett and Macfarlane & Glen for plaintiff in error.
[Argument of Counsel from pages 152-153 intentionally omitted]
Messers. H. Bisbee and George C. Bedell for defendant in error.
[Argument of Counsel from pages 153-154 intentionally omitted]
Mr. Chief Justice Fuller delivered the opinion of the court: